“Is it scaleable?”
If you’re an entrepreneur, then there’s a good chance that someone has asked you this question before.
If you’re an investor, then you’re probably the one asking the entrepreneur if it’s scaleable.
If you’re thinking about becoming an entrepreneur, then you may be asking yourself if any of your ideas are scaleable.
Scale is a popular—and important—topic in the entrepreneur community. If you’re thinking about scale, take a half step back and a deep breath. Think about these 5 things before thinking about scale.
1. Does your company have any customers, clients, or users yet?
For entrepreneurs who already have traction, then you’re probably rolling your eyes at this one. Move onto the next point.
But this is something incredibly important for entrepreneurs who are just starting out.
If you’re still in the idea phase, your first priority is to see if people actually buy what you’re selling. Scaling takes customers. If nobody’s buying what you’re selling, then there’s no such thing as scaling. Thinking about scale before your first customer, client, or user is premature.
Focus first on getting people to buy what you’re selling.
2. Can you deliver on your promises?
A business is a set of promises between you and your customers.
You promise your customers that you’ll do something, like give them a product, service, or experience. Then you make other promises to them, like that you’ll do whatever you do on time, honestly, and at a high quality.
Break those promises to your customers, and you’ll lose them.
Without customers, there’s no such thing as scale. So before you think about scale, pay good attention to delivering on your promises.
3. Can you replicate your delivery over and over again?
It’s one thing to deliver on your promise once, but can you do it again, again, and again?
We’re not going to be perfect as we build our businesses. We’re not always going to deliver perfectly on every promise to our customers every single time. However, we have to be able to deliver on the vast majority of transactions.
Businesses don’t stay in business if they can’t succeed over and over.
There’s also another reason why replication is so important to master before you think about scale. When you boil “scale” down to its most essential piece, scale is simply replicating something over and over again.
If you can master the processes that go into replicating your delivery, then you’ve just created the platform on which to scale.
Fine tune your processes, and you’ll be in a strong position to scale.
4. Are you able to continue building your business at the same time you raise money?
Scaling takes resources.
You’ll need human capital, and you’ll need monetary capital. Human capital will always come from the outside. In other words, you’ll always have to find or attract people from outside of your business.
Monetary capital can come from internal and external sources. You can bootstrap your business, which is when you fund the entire operation from the revenues you make or your own personal money. It’s not impossible at all to scale with your own money, but it generally takes longer to do.
Some entrepreneurs prefer to use outside money to grow. Outside money can come from a bank, grants, or investors.
Since “raising capital” is an enticing and omnipresent topic among entrepreneurs, I want to encourage you to keep one thing in mind if you plan on finding investors.
Finding, signing, keeping, and managing investors is a full time job.
And while you find, sign, keep, and manage those investors, your business has to continue to grow.
Before thinking about scaling through the use of other people’s money, be confident that you’ve put the pieces in place that can allow you to invest your time into finding investors.
5. Do you even want to scale at all?
This is a massively important question for you to answer before you think about scale.
I’m going to say something that you won’t hear often within the entrepreneur community, especially if you’re in the technology space: You don’t have to scale your business.
One of the beautiful things about being an entrepreneur is that you get to decide what you want to see from your business. You get to paint the vision of how big you want it to be. You have the power to keep things small if you want to. You decide.
In my city, there are two coffee shops I love going to in the arts district.
On the outside, they look practically the same. Cozy, artsy atmosphere. Most of the men have beards, most of the women wear flannel, and almost everyone wears a beanie. Oh, and they both serve great coffee.
But when you dig into their business structures, they couldn’t be any more different.
One is nothing more than a coffee shop. They don’t want to be anything more than a coffee shop. They want to be a small business. They want to have regulars. They want to serve great coffee.
The other wants to eventually disrupt a very particular part of the worldwide coffee bean distribution chain. Part of their strategy is to scale to a point at which they have so much weight that people have to listen to them.
The same goes for you as a business owner. Before thinking about scaling, take the time to think about if you even want to scale at all. Scaling when you don’t want to might be the worst thing you could do for your business.
Worse, it might just be the worst thing for you.
It’s ok if you’re not ready to scale, and it’s ok if you don’t want to scale at all.
Peer pressure is the second-worst reason to try and scale your business.
Insecurity is the first-worst reason.
If you want to scale but you’re not ready, then work hard to get ready. If you don’t want to scale your business, then don’t.
You’re the entrepreneur.
It’s up to you.
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Photo: Flickr/Wendelin Jacober